Powerscourt

By Powerscourt on 29/08/2020

Powerscourt Coronavirus Briefing – 29 August 2020

ANALYSIS

It’s the August Bank Holiday weekend – with a difference. None of the events usually held at the end of August, like the Notting Hill Carnival and the Reading and Leeds festivals, are taking place. Despite this, the RAC says an estimated 18 million journeys will be made by car – 1.8 million more than in 2019.  The weather has at least held with tradition – it seems set to remain wet.

Authorities around the world continue to grapple with second spikes and localised flare-ups. Rules requiring Parisians to wear face masks come into force as France reports 6,111 new cases – the highest since the peak of the outbreak. In Spain, children as young as six will have to wear face coverings at school.  The US has bought 150 million rapid coronavirus tests, said to provide results within 15 minutes, as Texas becomes the third state to hit 600,000 cases. Latin America is the current epicentre of the pandemic, with the region accounting for almost half of all deaths each day.

In the UK, lockdown restrictions put in place in parts of Greater Manchester, Lancashire and West Yorkshire are to be lifted on 2 September, thanks to what the government described as “positive progress”.  The good news was overshadowed by the leak of a report from Sage (the Government’s scientific advisory group) that predicts a reasonable worst-case scenario of 85,000 deaths this winter.  The report rules out school closures but says other restrictions may need to be re-introduced.

The Bank of England still has the firepower to fight the emergency said its Governor Andrew Bailey, delivering the keynote on the second day of the Jackson Hole economic policy symposium, but he worries about the longer-term challenge of making sure the BoE has enough “headroom” to launch a big bond-buying operation when a future crisis hits. 

Mr Bailey hinted that the BoE might want to unwind asset purchases before it moves to raise interest rates from their current low of 0.1 per cent, in order to make sure the central bank could “go big and go fast” with a decisive QE operation in a future crisis. It could also consider opening up its QE programme to a broader range of assets.

 

WHAT ARE COMPANIES SAYING?

 

Retail

Coca-Cola
Coca-Cola is to become the latest multinational company to cut thousands of jobs, setting out plans to restructure its business in response to a fall in demand after bars, restaurants and other venues closed to stop the spread of COVID-19. “Voluntary separation” will be offered to 4,000 of the beverage maker’s employees in the US, Canada and Puerto Rico while similar schemes would be offered to an undisclosed number of workers in other countries. The company also put staff on notice of the possibility of compulsory redundancies, although it said the voluntary reductions would limit the numbers affected. xx

eBay
Online sales of secondhand goods have boomed during the pandemic as the trend for “pre-loved” fashion and homewares took off while high street stores were closed. Sales of used goods jumped 30% on eBay between March and June this year, leading to an overall 10% rise in the first half of 2020 compared with last year. Despite the cancellation of events and closure of pubs and clubs which has hit the wider clothing market, secondhand or vintage fashion is the fastest growing and biggest category, with sales on eBay more than 200 times the level of that in 2018 in January to July this year. xx

Greggs
Greggs is aiming to reopen a distribution depot next week where about 20 members of staff tested positive for coronavirus. Shares in Greggs fell yesterday amid attempts by the bakery chain to bring the COVID-19 outbreak at the site in Leeds under control. Testing and contact tracing is continuing to determine the extent of the outbreak at the site, which typically employs up to 150 people. Roger Whiteside, chief executive of Greggs, said the company was “working closely with Leeds city council and Public Health England to ensure that we minimise any possible impact on our customers and the wider community in Leeds and the surrounding area”.xx

Waitrose

Waitrose has struck a deal to sell online groceries through Deliveroo – fuelling speculation over a possible game-changing tie-up with Amazon, which owns a major stake in the takeaway courier. Around 500,000 Waitrose customers will be able to get ready meals, fruit and veg, meat, milk and cleaning goods delivered in as little as 30 minutes through the trial partnership, which will initially run for 12 weeks. It comes as supermarkets throw millions of pounds at a digital gold rush after a surge in internet grocery shopping triggered by COVID-19. 

IN THE NEWS

A tale of two cities, before and after COVID – The Daily Telegraph

UK businesses offering incentives to coax staff back into the office – The Guardian

Bank still has firepower to help economy through pandemic, says Andrew Bailey – The Times




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